Saudi stocks rebound as selling eases

Reuters/Dubai

Saudi Arabia’s benchmark index recovered most of its early-week losses yesterday as investor concerns of a political conflict in Syria spreading wider to the region eased, while all other Arab markets also rose.

Qatar’s index ticked up 0.06% to 9,430 points.

Saudi Arabia’s benchmark advanced 1.8%, its second consecutive day of gains since Saturday’s 4.3% plunge.

“The Mena markets are attractive and political tensions have always been there,” said Ali Adou, portfolio manager at The National Investor in Dubai. “Despite the risk, the more the market drops, valuations become attractive and more buyers return.”

Saturday’s panic sell-off on the Saudi bourse - dominated by retail investors - was triggered by political tension in Syria intensifying; King Abdullah cut short a holiday abroad to deal with the issue.

Egypt severed its democratic ties with Damascus, backing a no-fly zone over the country wrought by civil war.

Heavyweight firms made a come-back. The petrochemical shares index rose 1.6% and the banking index climbed 1.9%.

UAE markets also recovered losses from the previous session as selling on political worries proved short-lived and a bullish local economic outlook outshined.

Dubai’s index rose 1.6% and Abu Dhabi’s benchmark climbed 0.4%.

In Kuwait, the index gained 1.6% after a court ruling dissolved the parliament and called for fresh elections.

Analysts said investors reacted positively to the dissolution of the parliament elected in December. Opposition boycotted these polls in protest to a new voting system decreed by the emir. The court upheld the voting rules.

Egypt’s bourse mirrored the regional trend and rose 1.2%, cutting 2013 losses to 14.7%.

Elsewhere in the Gulf, Oman’s index climbed 0.4% to 6,510 points, while Bahrain’s measure gained 0.6% to 1,206 points.